Coming soon! Hourly – Empowering the Invisible Workforce for Shared Success

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In this interview, AJ Richichi speaks with Erik Frederick, a seasoned CEO and CFO, on the pivotal role of company culture in boosting employee engagement and performance. Frederick underscores the critical importance of genuine leadership and its influence on cultivating a positive work environment. He shares how UNO's Pizzeria and Grill demonstrated robust support for their staff during the COVID-19 pandemic, reinforcing his point on the value of treating hourly employees with respect and dignity.

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AJ Richichi (00:00.29)
That means it's working.

Erik Frederick (00:01.39)
Hehehehehe

AJ Richichi (00:03.554)
Hey, Erik, it's so good to see you again. Yeah, thanks for coming on the pod. Erik, for those of you that don't know, storied CEO and CFO across different industries, all pertaining to the hourly workforce. He's had stints at Uno restaurant, which is where I had a lot of dates with my wife in Syracuse, New York, believe it or not. Fairway, which is a grocer, second time around, which is a large retail.

Erik Frederick (00:05.358)
Good seeing you, AJ.

AJ Richichi (00:32.162)
chain staples and a brief stint at the Navy. But Erik, thanks for being on. And I thought, I know we've talked a little bit in the past about your time in the Navy. Let's start there. Like what important lessons did you learn with the United States Navy and how on earth did you end up as the CEO of UNO from your stint there?

Erik Frederick (00:43.885)
Sure.

Erik Frederick (00:54.605)
Sure, well, it was sort of a long progression. I was in the Navy after college. I went in the Navy ROTC program, so I owed them some time and everything. But phenomenal experience put me through college. But really, that's where I learned a lot of skills. I learned the difference that one of the great things I learned was managers do things right, leaders do the right thing, and the really best do them both.

And I mean, that was sort of the overarching part of what I learned. And, you know, like in a great, probably one of the best examples of where those intertwine was really getting down with your people, right? Because, you know, of course you want to look at the metrics and all that kind of thing as to what's happening. And, you know, we had our own for different things. But you have to actually see what's happening, you know, out there with your people.

to really understand what's happening. I translated that to the restaurant business or retailers by spending time in the actual stores with them. And don't get me wrong, I love the PR value of undercover boss, but realistically, if you have to do that to learn about your business, you should have been there a long time ago. And I think that's true for most of the folks that do it. And the other great thing about coming out of the military is you get

all walks of life. You get people who come from very wealthy backgrounds to people who come off of a farm to people who came out of gangs in inner cities to just your average middle class person. So it was a terrific experience and the foundation of my leadership skills.

AJ Richichi (02:32.866)
Yeah, that's great. And you said something really special there about like p p p p p p p p p p p p p p p p p p p p p p p

Erik Frederick (02:48.938)
Thank you.

AJ Richichi (03:00.674)
Right? Like, oh, of course culture is important, but that's a real metric that you use. And it's one of the top five things that you mentioned in your trophy case, if you will, of what you've been successful at. So talk to me a little about that. Like, why is, well, let's start. Why is that metric important? And how, how have you, how have you defined it in the past and how does it contribute to all of your growth?

Erik Frederick (03:03.433)
Sure. Well, let me take a step back though and just talk about culture in general. Every company has a culture.

Erik Frederick (03:33.257)
like it or not, you have a culture. And whether that's the culture you want or not is pretty much up to the leadership team as driven Erik Frederick (03:33.257)
like it or not, you have a culture. And whether that's the culture you want or not is pretty much up to the leadership team as driven by the CEO. HR is helpful, but they can't own driving your culture. That comes from the CEO. And I'll give you an example. I spent years at Staples and at least in the home office, being analytical and smart was a very positive thing. And something that...

defined who was successful there and who was not. But I wouldn't say that was true at Uno at all. We had a terrific culture. We had one of our, you know, sort of core values was genuine kindness. It fit in the hospitality. I'm not saying they were jerks at Staples, but I'm saying genuine kindness would not have set them apart. So every company has that and you have to, but what's important about that is there's elements of culture that are bad and

and you have to get rid of them or counterproductive to what you're trying to do. And they will frame your strategy more than you know and how you want to do things. So that is a big part. And you have to take your culture and either accept it as it is, harness the good parts and take it someplace else. Or you have to say, we need to change our culture. Be super clear about how you get there. Probably build that with consensus.

And then you've got to reward those who walk the walk and frankly be ready to make the hard decisions about people who are not, and especially with senior leadership. But to get down to how do you measure that, one of the things that I've, you know, the kind of managerial bag of tricks, if you will, is just engagement scores. And the Gallup organization has a really good one that they've used in a lot of big companies.

At the end of the day, they really come down to, do you want to be working here a year from now? Are you treated with respect? Would you recommend your friends to come here? And really, when you kind of get down to that, there's a lot of other things you can drill into so that you can prove, do you have the tools you need? Is it a safe place to work? If it's an unsafe place to work, they're probably not going to want to be there in a year from now, but it is a good drill into how you get a better score, things you can do and whatnot.

Erik Frederick (05:55.141)
And in my experience, which whether retail or restaurant, multi -site has probably as many similarities, whether it's retail or restaurant as they do differences. But one thing that is absolutely clear and evidenced, you know, in the numbers is if you make a list, if you do an engagement survey, and again, just how excited are people to work there? You do go top to bottom.

and then you make a list of most profitable to least profitable, right? It's the same list. It really is. And more often than not, you know, it's, you know, it's, you know, it's, it

AJ Richichi (06:34.594)
Why do you think that is? Let's double tap there, because that's so interesting what you said. You said there's a direct correlation between employment engagement surveys and happiness and performance of those restaurants. Right? So why do you think that is?

Erik Frederick (06:46.724)
Yeah.

Well, yeah, no, it's a great question. And, you know, one of the things is I will always take an A manager in a B minus location over, you know, a B minus manager in an A location. And the reason is, listen, I've got, when I was at Uno, I had this manager who had an Uno on the wrong side of a dead mall in Bangor, Maine. This guy crushed it.

AJ Richichi (07:05.922)
and it's your

Erik Frederick (07:19.524)
He was an amazing leader. His people loved to work for him and they loved it. And so when I go up there and visit, when the food came out of the kitchen, you just wanted to take a picture of everything that came out. The place had a vibe to it. The servers were genuinely, genuinely friendly. They weren't like reading from a script. And his assistant general manager made the place look absolutely stunning on the way in, because she just...

had pride and all that kind of thing. You don't get that if you're not engaged with the business and you're just kind of punching the time clock or waiting for the next W -2. And they would grate their horrible location. So they would get catering orders. And what do you do with a dead mall parking lot? You have a flea market. So they would set up a stand and you go the extra mile. And that happens when you love what you're doing and you love your job.

AJ Richichi (08:04.962)
Right. Right.

AJ Richichi (08:15.906)
Right. And when you think of corporate and the individual general manager, and then of course the crew members, there's a lot of responsibility for the customer care. Right. And we talk about culture and I know there's listeners on the pod that are from, you know, the CEO of major corporations to franchisees with 10 to 15 locations to single unit, general managers and everything in between. So when you think about culture, you're talking about from.

establishing the core values from a corporate, the CEO of UNO's international, if you will. And then with the BangerMain example, you're talking about the general manager buying into that, right? And how important would you say, or what are some, let me rephrase that, what are some things that corporate can do to ensure that at the ground level, the core values of the business are being played out?

Erik Frederick (09:02.849)
Well, I would take that in the opposite direction. And one of the things that we did at UNO is we said, what are our core values? It wasn't me and my leadership team coming down from the mountain, you know, and saying, this is what they are. And by the way, when we established ours, we didn't want to do table stakes. And we didn't want to have, you know,

AJ Richichi (09:12.898)
Oh, okay. Love it.

Erik Frederick (09:30.848)
integrity and respect for others. We wanted things that, you know, what's truly unique about here and who wins. And those are antes to the game. You better have those things to show up to work here. We went the other way. We would, we got to, we split up in different groups and we said, who is really successful here that if we could put in front of, you know, people to say, this is the exemplar of the culture that we want to have, who would they be?

And so we kind of tried to narrow that list down to like, you know, four to six or something like that. And then we had this long list of adjectives and we went through and said, what are the adjectives that really best describe these people? And you can't use them all. You can only use four or five. And that's the hard part is you really break it down. And so guys like my general manager in Bangor, guys like...

one of my franchisees in Philadelphia, a couple of my fellows in IT, they were like, unanimous, this is what we want out of people. And then we described it in ways that would follow. And so we really took the good parts of the culture and everybody got it. They're like, oh yeah, that's exactly who's successful here and really leverage the good parts of what we had rather than saying, hey, this is what it's gonna be. Look, UNOS is an amazing place.

Nike is a great company. My understanding of Nike is it's a very competitive culture in a very good way. Go figure, right? You know who they are. But competitiveness would not have been a word I would use to describe people at Uno. And I think it would have been counterproductive to bring something like that in. And not that that's a bad attribute, but I go back to my, your culture sort of is what it is. One.

There are a couple of things I inserted, you know, myself and some of them come back to the military and less cultural values, but more like things like one thing that got us through COVID is I'm a very, very big believer in the law and the adage that players may win the game, but it takes a team to beat the odds. And teamwork was such a huge part of our culture that, you know, I know...

AJ Richichi (11:46.772)
Hmm.

Erik Frederick (11:52.925)
being in multi -site and other places, the willingness to help other people and send their people over, even though when they were short, to help somebody else keep open, was just absolutely phenomenal. People are like, oh my God, you took over Uno in April of 2020, how hard was that? Well, but I had a lot of elements of an amazing culture behind it. And great, there was some financial things that we had to do and some cost savings, but I gotta tell you, if we didn't have that amazing culture in place,

AJ Richichi (12:07.074)
Tough time, it's tough time.

Erik Frederick (12:21.853)
you know, that we could really leverage on some of those things, you know, and build on probably wouldn't have happened, you know, and so, and so really driving that and, and it makes a big difference and it's got to go in your hiring and it's got to go in. If someone doesn't fit that culture, they got to go and people had, and,

AJ Richichi (12:39.49)
Yeah, and I know, yeah, and I know like famously UNOS did some amazing things during COVID to help their employees, help those in the distribution centers. Can you touch on those really briefly for our audience?

Erik Frederick (12:53.052)
Yeah, so a couple things is your people need to know one, where you're going. And I gave you a great example on that before. I may come back to it. But the other is they want to know that you genuinely care about them as a human being. So a couple of things that we did is, you know, if you remember back to the days when the vaccines first came out, it was just nearly impossible to get an appointment. You had to, you know, press refresh on your website or be on hold.

AJ Richichi (13:19.714)
Yeah, my wife and I drove like two and a half hours to no town South Carolina where there was one CVS that was available and it was willing to do it for us, right? Which seems crazy right now. Like we're gonna be telling our kids kids stories about the time Omicron came down and everybody was losing their minds, but keep going, keep going. Yeah.

Erik Frederick (13:29.018)
Yeah, yeah.

Erik Frederick (13:38.139)
Yeah, yeah. So imagine somebody somebody working, you know, a shift. And by the way, we had a CPG, you know, frozen pizza manufacturing business in addition to the restaurants. So they they don't they're not able to be on the phone. You're you're cooking or you're serving and you can't hit refresh and all that. So what we did and the other thing, too, is you did you and I did the all this in English.

AJ Richichi (13:54.978)
Right.

Erik Frederick (14:03.578)
So a lot of restaurant workers and people who worked in our factory, they spoke a dialect of Portuguese. And so if you think about their ability to consume information of what's out there, right, very, very difficult. So what we did is we set up a help desk where we literally took their information and we set up their appointments for them. And in one case where our factory was,

AJ Richichi (14:03.842)
Hmm.

Erik Frederick (14:33.274)
we were able to work with the local health department and they came in, because we had such a concentration of people, they came in and did the vaccines there. And then we invited our restaurant people to come there because it was a central place and all of that. And so, you know, we had in our plant a 92 % Vax rate. We didn't make it mandatory or anything like that. And this is among a population that generally was in the 40s.

AJ Richichi (14:45.314)
Wow. Yeah.

Erik Frederick (15:01.241)
when you looked at their demographics. So we demonstrated we cared. And then in our restaurants, these guys worked, these men and women worked nonstop. I mean, during COVID, it was you were answering the phone, making the pizza, and then running it out to the car. And so what we did is we gave everybody, all the general managers, a round trip ticket for two anywhere in the continental United States. Coach, coach. But anyways, and...

AJ Richichi (15:02.082)
Wow. Yeah.

Erik Frederick (15:28.472)
But we asked them to post on social media their experience, wherever they were. They were with their mom, they were in Vegas.

AJ Richichi (15:35.074)
What were some of those stories? I mean, like what photos did you see? Was it mostly beaches and Disney or were you surprised by some?

Erik Frederick (15:42.424)
You know what? I wouldn't say surprise. There was a fair amount of Vegas and Disney. That's definitely for sure and all that.

AJ Richichi (15:51.17)
Right. Those with kids, those without kids probably. Between those two.

Erik Frederick (15:55.32)
Yes, yeah, right, right, right, right. But the ones that kind of touched me, I mean, there was one, you know, one person who said, look, I don't want to travel, but my mom lives in Puerto Rico. Do you mind if I fly her here? I'm like, OK, no, that's the easiest thing in the world that was touching. And there are a few things where families got together. But what was really cool, and I didn't even think this through when we implemented it. Well, of course, they're not all going to take vacation at once.

AJ Richichi (16:07.298)
Wow, yeah. Yeah, yeah.

AJ Richichi (16:18.21)
Right.

Erik Frederick (16:24.823)
So when they posted on social media, it was like every week, every other week, somebody was just saying, wow, what a great thing this is. And they had the experience and all that kind of thing. And from a financial perspective, it was not that big of a deal. And we had a tiered offering for assistant general managers and our regional directors got a little more, but.

AJ Richichi (16:42.914)
Yeah. Yeah.

Erik Frederick (16:49.494)
you know, the bottom line is, is they had an experience and they're like, wow, what a good place to work and all that. And, and not for nothing, the other, you know, kind of good thing from a business standpoint was, if you think about it, they needed time off. And so, and so it kind of got them out and, you know,

AJ Richichi (17:07.426)
Yeah. Yeah.

Yeah, well, you know, it's it just is so interesting, right? And I talk a lot about this a lot in the book is the humanization of the hourly workforce is oftentimes like seldom across different businesses. And, you know, for me, you know, this is a really great perk that most businesses probably could swing financially that provides an opportunity that likely these people, you know, with credit card debt and student loan debt don't get to do very often.

Right. And financially, I know you're a big finance person. It probably costs less than what you would need on a spot bonus, but the intrinsic value and likely the retention from a retention perspective yielded far better outcomes.

Erik Frederick (17:55.125)
100%, 100%. By the way, he said a word I just, I cannot believe is in the English language. And that's called the humanization of, I mean, fill in the blank. I mean, can you imagine, like I can't imagine, boy, I wish my board would humanize me. I mean, I just, you know.

AJ Richichi (18:04.034)
Yeah.

AJ Richichi (18:11.362)
What do you think? You know, you talk about it and I talk about a lot in the book is, you know, these workers are oftentimes feel invisible, coining the phrase like the invisible workforce. It's those people that we walk by or we get served by or, you know, are cleaning our clothes or our houses and systemically may not have the resources that you and I have to build a better life here in America. Right. Sad reality, but.

You know, I think that you across your career, and I know that there's some other examples that fairway at second time around where you've made an active decision to treat these employees like humans. And sadly, and, uh, you know, my, my really humble opinion is that doesn't happen very often. Right. So what, what about you and your style and what's important to you as a person drives you to make this impact in people's lives?

Erik Frederick (19:08.563)
Well, I mean, a lot of it is just how you're brought up and how you think. And again, I go back to my formative years in the Navy where, you know, I was lucky enough to work for some just amazing, amazing leaders and anyone who knows anything about, you know, how junior officers are or has ever seen like a war movie. The senior enlisted guys, a big part of their job is to basically...

teach the young officers how to lead and manage. And I was just blessed in having some incredibly patient senior enlisted people and some very, very inspirational senior officers that were good enough to mentor me and gave me the patience. And I would argue anything I do good, I was probably awful at at some point. And somebody was good enough to coach me on it and took the time to have a difficult conversation to say, here's a better way.

And I guess my advice to young people is really funny. When you coach people as a manager, there's people who take your advice and they go off to the races. There's some people who hear you, but then they don't change. And there's other people who you coach them and they get all defensive. And they're like, well, what about you? And after a while you're like, this isn't worth it.

You know, it's it's just a hassle, but I'm going to keep coaching the person who's good at it. And the people who get all defensive as if any of us are perfect, they don't get coached anymore. And then next thing you know, they're not being promoted and you know, their career just kind of languishes and they really don't make forward progress. And, you know, for your manager to come by and say you could do better at this or you need to improve this and and and.

And to go ahead and do it, you're going to get a lot more from that. And any person young in their career, it's one of the best things you can do is seek coaching and always be grateful for it because it's always intended to make you better.

AJ Richichi (21:11.906)
Yeah, because you know, there isn't statistically a lot of upward mobility for everyone, like across the hourly workforce. And I know this because at Sprockets where I'm CEO, we have this feature that our customers, so let's say a restaurant signs up, they upload a spreadsheet of all of their past applicants. So these are people who applied 10 years ago, five years ago, two years ago, one year ago, six months ago, and like six weeks ago.

And what we have is AI called Jojo that reaches out to all of these people in batches, encouraging them to come back and work for the company. So instead of, um, you know, when you need your next 10 people going to a job board and paying for job fairs and all these things, you just, uh, kind of bluntly, you harvest your past applicant list and treat them like a community of people rather than a candidate graveyard to come back and work.

Erik Frederick (21:42.992)
Oh wow.

Erik Frederick (22:01.167)
. .

AJ Richichi (22:10.242)
And it's a long way to get to my point, which is statistically, those that applied 10 years ago, five years ago, one year ago, six months ago, and six weeks ago, all basically have the same likelihood to reapply for that same job, which is sad, right? So if you applied 10 years ago or six weeks ago, the conversion rates are essentially the same.

Erik Frederick (22:20.591)
That's interesting. Yeah, and I mean, the one thing about certain jobs, and I just think.

Especially like server jobs. First off, I think everybody should be a server at some point in their life. You know, and you know that what you learn about people and yourself and patience and all that thing and so. But at any rate, you know, but I love what you're doing and I mean, I think that would be interesting as well for former employees to, you know, get people to come back. But but it doesn't have to be that way.

I think what happens is when things are tough, the easiest expense to cut. Well, among marketing is probably the easiest and biggest, but cutting training is probably one of the easiest things to do. And when you cut hours, well, I can't cut an hour of you cooking, you know, but I can definitely cut that training hour. And I think that hurts the upward mobility. But again, it's a little bit nearsighted because when you do that, then...

AJ Richichi (23:36.354)
Right.

Erik Frederick (23:44.62)
Okay, well, now you lose your shift supervisor, your manager, your assistant general manager, your manager, and you end up having to go to the outside. And then you're people like, there is no upward mobility here. Well, of course not because you didn't train them. You know, and now, by the way, you better hope where the other folks came from, that their company did a good job of training because that's what you're going to get. You know, and, you know, and I don't care. The funny thing is about hiring from the outside, you look at a resume and like, oh my God, I wish we had people like this because, you know,

AJ Richichi (24:13.09)
All right.

Erik Frederick (24:14.188)
I mean, the funny thing is if you look at my resume, it's got some, you know, accomplishments and all that kind of thing. I could write 20 pages of, here are the mistakes I made. I won't do one year dying. You know, it's no, um, you know.

AJ Richichi (24:23.682)
Right. Yeah. And you know, like one of the reasons why I was so excited to have you on the pod is, you know, others in the industry know you as somebody who, you know, really goes against that grain, invest in people. And I think, you know, maybe consciously
Hourly

Empowering the Invisible Workforce for Shared Success

By AJ Richichi

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Sprockets works alongside your current system to help you source, screen, and select the best applicants for open positions. It’s the solution to hiring hourly employees you’ll wish you discovered sooner.